Oi faces setbacks in negotiations with Anatel and creditors

12:00 AM (GMT -03:00) – Jul 17 2017

In the countdown to its creditors' meeting, scheduled for September or October, Oi faces setbacks in the two most important mediations of its judicial recovery process. The National Telecommunications Agency (Anatel) — the company's largest individual creditor — wants to end the mediation process established by the Justice, according to a petition dated from June 29. The rescheduling of the R$11 billion debt with the regulatory agency is considered essential for Oi's survival. Anatel claims in its petition that credits whose administrative processes have already become final are not subject to mediation and can only be paid in installments. Contacted by Valor, Anatel declined to comment. Another mediation front — talks to pay about 53,000 creditors owed up to R$50,000 — is stalled due to an injunction obtained by the China Development Bank (CDB), which questions Oi’s criteria to pick creditors who will be paid first.

Farm credit faces austerity squeeze

12:00 AM (GMT -03:00) – Jul 17 2017

Farm loans are going through a “new era of squeeze” already signaled by the economic team. National Monetary Council's measures to adjust spending and avoid a concentration of borrowers like farm cooperatives are having an effect. The measures include lowering the ratio of rural savings balances that must go toward borrowing to 65% from 74%; demanding that cash deposits be used only for working-capital loans; blocking marketing and processing loans from subsidized interest rates. The government believes that non-directed funds from letters of agribusiness credit (LCAs) may help pick up the slack from borrowers not included in the annual Crop Plan.

Mining royalties forecast to grow by R$1.5bn

12:00 AM (GMT -03:00) – Jul 17 2017

The government hopes to get a boost of at least R$1.5 billion a year from mining royalties. Officials based the estimate on the royalty increase slated for announcement on July 25 as part of a package of provisional measures (MPs) aimed at modernizing the industry's regulatory framework. The changes include a new regulator to replace the National Department of Mineral Production and at least 20 rules of the National Mining Code, enacted in 1967. The Finance Ministry wanted to increase the federal share of royalties beyond today's 12%, but other government officials believe doing that through an MP would not be politically convenient.

Real-estate recovery stumbles on costlier funding

12:00 AM (GMT -03:00) – Jul 17 2017

What small growth was seen in Brazil's real-estate lending this year was dominated by cheaper credit lines. But restrictions on loans financed by the Workers' Severance Fund (FGTS) may strangle the recovery since funding has become more dependent on market rates – and banks' willingness to cut their higher rates. Caixa Econômica Federal, the state-owned bank that dominates Brazilian mortgages, has recently stopped extending new loans from a line focused on government housing program Minha Casa, Minha Vida called Pró-Cotista, after lending its entire budget of R$6.1 billion since January. Banco do Brasil, another state lender, also offers Pró-Cotista loans but on a smaller scale. It has increased overall lending so far this year by 35%, to R$700 million.

Shell and Cosan in talks for Comgás share swap

12:00 AM (GMT -03:00) – Jul 17 2017

Shell and Cosan have started talks to soon trade the Anglo-Dutch oil major's shares in Comgás for a slice of Cosan, Valor has learned. Cosan had agreed to swap a 17.1% stake when it purchased the gas distributor's control in 2012. The negotiation will not take into account the market value of the gas distributor, using instead a price adjustment mechanism that includes its dividends and resulting in a R$200 million payment to Cosan, which already controls 62.7% of Comgás. Cosan and Shell also control Raízen, a joint venture producing sugar, biofuel and operating co-generation plants.

Neoenergia IPO could raise R$4bn

12:00 AM (GMT -03:00) – Jul 17 2017

Power distributor Neoenergia meets with investment banks this week to study the possibility of an initial public offering as soon as September that could raise R$4 billion, Valor has learned. The final decision depends on the outcome of other stock offerings in the pipeline, particularly Carrefour and IRB's. Credit Suisse, Morgan Stanley and BB Investimentos are participating in the preliminary talks with Neonergia, which is estimated to reach a market capitalization of up to R$35 billion. As reported by Valor in June, the IPO aims to generate liquidity to the power distributor's top shareholders, Banco do Brasil and its pension fund, Previ, and also finance investments in generation. Sought by Valor, all parties declined to comment. After its recently announced incorporation of rival Elektro, Neoenergia will become the largest power distributor in Brazil regarding clients and assets.

Brasil Plural transfers portion of assets under management to Genial

12:00 AM (GMT -03:00) – Jul 17 2017

Brasil Plural will transfer part of its asset management unit to Genial, an investment platform controlled by the bank, as it considers attracting a new partner. Genial (formerly Geração Futuro) will control the Brasil Plural’s portfolio of liquid funds and hold R$15 billion under management, five times more than the current amount. Genial will remain with two families of its own funds — with Geração Futuro and Brasil Plural brands —, as well as products from other institutions. The unit will be headed by Carlos Eduardo Rocha, one of Brasil Plural’s founding partners. Brasil Plural’s asset manager will remain with about R$25 billion in assets including funds managed and allocated in illiquid funds.

Tecon Imbituta cargo nearly triples with new Asian route

12:00 AM (GMT -03:00) – Jul 17 2017

Santos Brasil, the largest Brazilian container terminal company, will expand operations in the southern region of the country. Tecon Imbituba, the group's container terminal in Santa Catarina state, won a bid to provide shipping service to Asia that will increase its cargo flow by 166%, to 120,000 TEUs per year from 45,000 TEUs. The service includes the weekly schedule of a vessel controlled by an international consortium of shipowners consisting of Hapag Lloyd, Hamburg Süd, NYK, Hyundai and Zim. The service starts operating on August 1st. The cargo profile will be 70% of exports and 30% of imports. Leased by Santos Brasil in 2008, Tecon Imbituba has capacity to handle 450,000 TEUs per year.